It’s become a dream for many to get themselves on the property ladder and while the challenge of securing a property is a lot more difficult than it was, it’s still doable.
With the right motivation and drive to save, along with finding the right mortgage provider and property, you could find yourself in your own property as early as this year! However, if you’re still far off from being able to afford a property of your own, then it’s important to lay the foundations now.
Your future self will thank you for being proactive in the earlier years of your twenties, than trying to scramble for a property as you reach the ripe age of thirty. Here are some top tips that will help you get on the property ladder this year.
Know how much you need to save
How much do you need to buy a property? The amount very much depends on where you’re planning to live. Living in the city, for example, is going to be more expensive and as a result, you’ll likely be living in a flat than a four-bed house.
It’s important to understand how much you’re going to need as a deposit and then you want to consider other costs on top of that. You’ll want money to pay for the solicitors you use, as well as the stamp duty and any other taxes that may be involved if you’re trying to buy overseas.
Most mortgage lenders need a 10% deposit, however, there are buying schemes which mean the individual or individuals are able to put down less. Work out roughly how much you’ll need to save so that you can start saving now.
Start making the sacrifices now
Talking of the present day, sacrifices are likely needed to save for a property. We all have a luxury or two in life that we spend on ourselves or others. To help save for a property and to widen that margin of saving you are able to accrue from your monthly income, you’ll need to sacrifice those luxuries.
Yes, it may mean that you spend less on clothing within the year. Perhaps fewer nights out on the town or cutting down on monthly subscriptions. There are savings to be made everywhere in your expenditures, so making these sacrifices now will mean you’ve got more opportunities to save over time.
Doing this now is going to help speed up the process of buying a property. It’ll shave down the number of months or years it’s going to take in order to get onto the property ladder.
Try to minimise your rental costs
Rental costs are likely going to be eating up the majority of your monthly pay packet. While it might not be possible for everyone to do this, it’s worth considering a move to a smaller property or one that’s a fraction of the cost you’re paying now.
While some do live in expensive areas, there may be more options available that don’t warrant you spending hundreds or thousands on rent every month. It may be worth negotiating with your landlord whenever there’s a raise in the rent. You may be able to stop them from raising it or at least come to an agreement on a reduction.
Minimising your rental costs means you have more money going into the savings pot, which is the most important part of the process.
Work out your mortgage options
What are your mortgage options? Have you explored this calculator for mortgages? Do you know the difference between interest-only and capital repayment mortgages? When you’re buying a property for the first time, it’s important to read up and do all the research ahead of time.
Not everyone gets the luxury of being taught about property investment and getting on the property ladder. In fact, many are going into it blindly and finding themselves at a disadvantage when they may have been able to get a better deal.
If you don’t have a clue about mortgages or home ownership, then it’s worth diving into the encyclopedia that is the internet, to learn more. There’s so much information online nowadays that even if you don’t have any knowledge, you’ll soon know everything there is to know about owning a property.
Consider a shared ownership
For those that are limited in their options to get on the property ladder, shared ownership is always something that is available. While you don’t own the property fully in relation to traditional mortgages, it is more accessible due to the reduced amount of deposit you’ll need to put down.
There are also options to pay off more of the mortgage to own more of the property over time. It’s a good one for those who need a step up before climbing onto the ladder.
Make your savings work harder
In this day and age, trying to make your savings go further is a challenge in itself. There are a lot of investment opportunities out there but not every one of them is going to offer a return or a guarantee that you’ll get your money back.
The best option to consider when it comes to making your savings work harder is to put them in high-interest savings accounts. Yes, let out that audible groan. While high-interest savings accounts are often few and far between, at this current rate of time there are a few worth taking advantage of.
Take a look at your current bank account and whether moving to another bank is a worthwhile option for your savings. Fixed savings accounts could also be worthwhile looking at if you’re not buying for a year or two.
Try finding a side hustle to make more
If you’ve got a talent that can make money or you’ve got some extra time on your hands, it’s worth finding a side hustle. A side hustle or part-time job perhaps that will help bring in the extra income each month will hopefully speed up the process of securing your first home.
There are a lot of opportunities to take advantage of and the internet has become a great place for side hustles and quick money-making schemes. From filling in surveys to selling handmade items via Etsy, take a look at what side hustles or jobs you could take on.
For those who don’t mind physical labour, you could always consider doing shifts in a warehouse for a company like Amazon or delivering food shops to homes in your local area. These jobs offer flexibility and many allow you to do as much or as little as you need.
Sell anything you don’t need anymore
If there’s anything that you could get rid of in your home that would make a bit of money, then do it. Selling anything you don’t need could be incredibly beneficial for raising the extra funds needed for your deposit.
Don’t underestimate the belongings you have in your home either. Sometimes, one person’s trash is another person’s treasure. It’s a saying that certainly rings true and with platforms like eBay available, it makes selling online a breeze.
Look at moving in with family or friends
It’s another point that probably wouldn’t work for everyone but it’s something to consider if it has the potential to be an option. Perhaps you have a family member or friend that’s looking to get on the property market too? This could be the perfect opportunity to get yourself on the property ladder with the help of another person.
Getting on the property ladder is possible with the right amount of perseverance and knowledge. Use these tips to help get on the property ladder this year.
